Accurate language translation services are important for trademark and patent law practitioners. The Supreme Court case Costco v. Omega is an appeal of a Ninth Circuit decision that upheld the Swiss watchmaker’s right to prevent Costco from selling legitimate watches that it had purchased from a gray-market vendor. The issue here is the power of a manufacturer to use copyright laws, which typically are used to protect creative works such as books and movies, to protect a what is essentially nothing more than a tiny logo found on these expensive watches. Traditionally, protection for a logo would fall under trademark law. However, copyright law grants more powers to an owner, including the right to prevent protected works from being sold or given away.
Also at play in this case is the well-established ‘first sale’ rule, which states that once a copyright owner sells a copy of a protected work, subsequent owners can sell it, rent it or lend it out as they see fit – a rule that protects such entities as video rental stores and libraries. However, the Ninth Circuit ruled that the first sale rule only applies to works manufactured in the US, and since the watches are made in Switzerland, sold to authorized dealers in Latin America, slipped to a gray market distributer and imported into the US – meaning the first sale occurred well outside US copyright law jurisdiction.
This issue could become interesting when a logo uses a foreign language and the foreign language translation has different, or unrecognizable meanings, in a foreign market.